Eliminate confusion in financial services sector, empower consumers

A conference on the latest trends in consumer banking organised by the Ad Club of Bombay had two panellists, Ajay Kakar, head of branding, Reliance Capital, and Sanjeeb Chaudhuri, regional CEO, Europe, Middle-East and Africa, Citibank

At a

conference organised by the Ad Club of Bombay, Ajay Kakar, head of branding, Reliance Capital, and Sanjeeb Chaudhuri, regional CEO, Europe, Middle-East and Africa, Citibank, discussed the need to eradicate confusion for the consumer in the cluttered market of financial services and the relevance of recognising consumer buying habits and understanding their needs.

Ajay Kakar talked of how cluttered the Indian financial services industry is and how it leads to confusing the consumer ultimately. Kakar pointed that although there are various financial services companies in India, mutual funds as a category have only 4 per cent penetration in the market. The penetration of general insurance stands at a mere 2 per cent. And the life insurance category accounts for only 17 per cent penetration.

Ajay Kakar

According to Kakar, there is great potential to tap the remaining larger share of consumers who do not invest money in any of these services due to fear or confusion. He highlighted the need to create India's first true retail financial services brand that can really guide consumers instead of confusing them.

Today, each financial services company is offering 100 categories, brands and products to consumers. And by doing this, most of the companies have got into each other's territories and added further to the confusion. Be it banks, LIC companies or mutual fund companies, all are calling out to the consumer to invest money with them by telling them that their service is the best. The consumer is left wondering, where do I start?

In the old days, the services used to be simple. If consumers wanted to save money, they went to a bank. If they wanted to protect their family, they went in for life insurance. And if they wanted to grow their money, they invested in a mutual fund. But now, the market has become so cluttered that consumers are keeping their money under their pillow, instead of investing it.

Kakar stressed on collective action and the need to simplify services for consumers. He emphasised empowering consumers instead of educating them as empowerment about services would stay longer with them than plain education.

Sanjeeb Chaudhuri

Sanjeeb Chaudhuri from Citibank said he believed that consumers today are just like children. It is very important for a financial services company to understand that like children, consumers are very demanding, focused and can recall old experiences. He said that marketers must obsess about customer needs and not about internal organisational goals.

According to Chaudhuri, consumers today have changed and become multitaskers. Advertisers have pumped up volumes to grab their attention. But the consumers have figured out ways to block advertising on media such as mobile phones and the Internet. He cited the example of Europe where 24 per cent of online users think that e-mail is the best way to learn about new products in the market. At the same time, 55 per cent of them want to get fewer promotional offers in their mailbox.

Chaudhuri said that putting more messages in one place would not help. But all financial services brands have to find a way to be invited to a conversation with consumers. Therefore, advertising has to be very relevant. It is important to recognise consumers, understand their buying habits and anticipate their needs. Only then can a brand hope to interact with the desired target group.